Cap Gemini - Registration Document 2016

REPORT OF THE BOARD OF DIRECTORS AND DRAFT RESOLUTIONS TO BE PRESENTED AT THE COMBINED SHAREHOLDERS’ MEETING OF MAY 10, 2017

6.1 Resolutions presented at the Ordinary Shareholders’ Meeting

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Registration Document 2016 — Capgemini

Procedures for setting fixed and variable compensation

does that of all key executive managers of the Group – fixed

year Y-1. As indicated above, this compensation comprises – as

Meeting in Y held to approve the financial statements of fiscal

respect of fiscal year Y are adopted by the Board of Directors’

The procedures for setting Mr. Paul Hermelin’s compensation in

amount, closely correlated to the Company’s performance.

variable compensation equal to 40% of this total theoretical

the total theoretical amount if objectives are achieved and

compensation paid in 12 monthly installments equal to 60% of

the year for the year in progress:

The Board of Directors therefore approves at the beginning of

indicated in the summary table below;

not represent more than 133% of fixed compensation as

therefore both capped and the variable component may

The variable component and the total compensation are

60% and 140% of annual theoretical/target compensation.

system, fixed plus variable compensation may vary between

individual objectives, with 50% minimum based on quantified

consolidated results and V2 based on the attainment of

parts: V1 tied to Group performance indicators and

The theoretical variable component is in turn split into two

the theoretical fixed and variable compensation components.

◗

200% of the theoretical amount. Therefore, as a result of this

components can vary between 0% and a ceiling equal to

objectives, set by the Board of Directors. Each of these

responsibilities and to reflect the strong growth and

unchanged since;

international expansion of the Group and has remained

years in accordance with the AFEP-MEDEF Code. Mr. Paul

the fixed component is not reviewed annually, but after several

◗

only reviewed in 2013 (+10%) following an extension of his

Hermelin’s fixed compensation was increased in 2008 and was

in line with the key indicators presented regularly to the market

budgeted Group consolidated results. The indicators adopted

determined based on a comparison of actual audited and

indicator. The level of attainment of these indicators is

of the V1 component and the weighting applied to each

the internal performance indicators included in the calculation

◗

and are tied to:

growth through Group Revenue for 30%,

❚

operating profitability through Group Operating margin for

❚

30%,

for 20%,

cash generation through the Group Free Organic Cash Flow

❚

this is the driver to assess the dividend level;

shareholders return through net profit for another 20% as

❚

strategic plan.

Board of Directors as conditions to deliver the long term

roll out of the Group’s strategy priorities approved by the

quantitative data

and, that objectives are clearly tied to the

of the total variable compensation was based on

were based on directly measurable items so that overall

75%

transformation”. The Board of Directors ensured the objectives

Industrialization and account centric culture” and “HR

“New Strategic Development”, “Strategic agenda around

felt into four main categories, “Succesfull IGATE integration”,

compensation. The strategic and operating objectives for 2016

the individual performance objectives underlying V2

◗

The V1 component varies in line with a formula applied for many

decades within the Group, that accelerates actual performance

upwards and downwards such that:

financial indicators is less than or equal to 75%;

the V1 component is nil if the weighted performance of

◗

varying on a straight-line basis between these two limits.

the weighted performance is greater than or equal to 125%;

the V1 component can reach twice the theoretical amount if

◗

recommendation of the Compensation Committee, by the Board

statements of fiscal year Y. The Committee meets on several

of Directors’ Meeting in Y+1 held to approve the financial

attainment by Mr. Hermelin of his objectives.

before the Board of Directors which decides the level of

another one in February 2017 to assess such performance

executive session of the Board was held in December 2016 and

percentage attainment by Mr. Paul Hermelin of his objectives. An

occasions before the Board of Directors’ Meeting to appraise the

variable compensation components are decided pursuant to the

The level of attainment of objectives and the amount of the

the Board of Directors’ Meeting that approves the financial

The variable compensation used to be paid end of March, after

percentage attainment of individual objectives set. Going

various variable compensation components and that decided the

statements for fiscal year Y, underlying the calculation of the

year Y.

Shareholders Meeting of the compensation elements for fiscal

Executive Officer will be paid following approval by the

forward, the variable compensation of the Chairman and Chief

Summary table of the theoretical structure of fixed and variable compensation

Theoretical compensation structure, base 100

Target

Min

Max

Gross fixed compensation

Annual variable compensation V1

Annual variable compensation V2

Multi-year variable compensation

THEORETICAL TOTAL IF OBJECTIVES ARE ATTAINED

100

140

% variable / fixed

67%

133%